Mischievous Lib Dem chatter is a political gift for Osborne

It is one of those peculiar permutations of coalition politics that George Osborne can consider himself very grateful to Lord Oakeshott, the Liberal Democrat peer and former Treasury spokesman, who has effectively called for the Chancellor to be sacked. Lord Oakeshott took to the airwaves (where he spends a considerable amount of his time) after the announcement of dire GDP data yesterday, to say that Osborne was performing as if on “work experience” and ought to be replaced by a more substantial figure. By that he meant Vince Cable, the business secretary, on whose behalf Oakeshott is often deemed to be speaking. Cable later on stirred the speculation further by suggesting immodestly that he “probably” would make a decent Chancellor, but this morning he publicly reined in his ambitions. He is a team player, he insisted, and Osborne leads the Treasury team.

There is, it has to be said, absolutely no chance of Cable being made Chancellor in this government. Really none at all. Zilch. The job would never go to a Lib Dem – its occupation by a Tory is part of the agreed fundamental architecture of the coalition. Cable will be lucky to stay in the cabinet at all in the next reshuffle. He has never been an ally of Nick Clegg in whose office he is seen as a grandstanding maverick and potential leadership threat. Even in opposition there was resentment of the way that Cable was held up as a mighty authority on economic matters – “St Vince” – poaching precious publicity from the leader. That feeling has since been exacerbated by a very personal irritation that Clegg has become the hated symbol of the u-turn on tuition fees, taking the full force of a vicious public and political backlash, when Cable ran the department that actually implemented the policy and yet escaped with hardly a scratch.

From the Tory point of view, Cable is a leftish fifth columnist. The recent revelation that he sends approving text messages to Ed Miliband will only reinforce the feeling among many Conservatives that the Business Secretary’s natural place is carping from the back benches.

But before the chatter about Cable started up, there were plenty of Tories willingly speculating about the need to move Osborne from the Treasury. Even quite loyal MPs were muttering about weaknesses in the heart of the machine and pointing accusing figures at Number 11 Downing Street. The charges are: the bungled budget, clumsy handling of the ensuing u-turns, suspicion that Osborne spends too much time in Number 10 plotting political attacks and not enough time running the economy, a broader feeling that there is no long-term strategy for winning an election other than hoping that Ed Miliband’s bubble bursts, over-reliance on short-term tricks and tactical manoeuvres, an obsessive personal animosity towards Ed Balls that is unseemly in one of the highest offices of state, a failure to develop a consistent message on what the government is doing to spur growth. There is a feeling on the Tory benches that Labour have been let back into the debate on the economy when they seemed wholly shut out of it a year ago.

In recent weeks I have heard William Hague, Michael Gove and Phillip Hammond all talked up by their fellow Tories as potential Chancellors. The surest way to kill that chatter is for a Lib Dem to pipe up and say Osborne should be sacked – and replaced with Vince, of all people.

There was never really any chance of Osborne being moved in the reshuffle. It would be an admission of economic failure on an epic scale and he is too close to Cameron. The Prime Minister is generally loyal to his friends – witness how hard it was for him to let go of Andy Coulson and how tenaciously he has clung to Jeremy Hunt. Of course in those cases there as an element of self-preservation. Losing high profile figures over phone hacking would have removed protective firewalls around Number 10. But it is also generally said of Cameron’s clubbable nature that he looks after his chums – which can, of course, be interpreted as a good a bad thing in politics depending on whether it is a mark of constancy or corruption. Cameron has ever fewer friends and Osborne is vital.

But it follows from that analysis that the Chancellor is practically unsackable. Yet he is also badly damaged and all those hostile whispers from his own side can’t be unwhispered. That leaves a feeling in Westminster at the start of the long summer recess that the Tory duamvirate’s strategy is essentially to build defences around the hole they are in and frantically keep digging.

Hannan Fodder: This week, Daniel Hannan gets his excuses in early

Since Daniel Hannan, a formerly obscure MEP, has emerged as the anointed intellectual of the Brexit elite, The Staggers is charting his ascendancy...

When I started this column, there were some nay-sayers talking Britain down by doubting that I was seriously going to write about Daniel Hannan every week. Surely no one could be that obsessed with the activities of one obscure MEP? And surely no politician could say enough ludicrous things to be worthy of such an obsession?

They were wrong, on both counts. Daniel and I are as one on this: Leave and Remain, working hand in glove to deliver on our shared national mission. There’s a lesson there for my fellow Remoaners, I’m sure.

Anyway. It’s week three, and just as I was worrying what I might write this week, Dan has ridden to the rescue by writing not one but two columns making the same argument – using, indeed, many of the exact same phrases (“not a club, but a protection racket”). Like all the most effective political campaigns, Dan has a message of the week.

First up, on Monday, there was this headline, in the conservative American journal, the Washington Examiner:

“We will get a good deal – because rational self-interest will overcome the Eurocrats’ fury”

The message of the two columns is straightforward: cooler heads will prevail. Britain wants an amicable separation. The EU needs Britain’s military strength and budget contributions, and both sides want to keep the single market intact.

The Con Home piece makes the further argument that it’s only the Eurocrats who want to be hardline about this. National governments – who have to answer to actual electorates – will be more willing to negotiate.

And so, for all the bluster now, Theresa May and Donald Tusk will be skipping through a meadow, arm in arm, before the year is out.

Before we go any further, I have a confession: I found myself nodding along with some of this. Yes, of course it’s in nobody’s interests to create unnecessary enmity between Britain and the continent. Of course no one will want to crash the economy. Of course.

I’ve been told by friends on the centre-right that Hannan has a compelling, faintly hypnotic quality when he speaks and, in retrospect, this brief moment of finding myself half-agreeing with him scares the living shit out of me. So from this point on, I’d like everyone to keep an eye on me in case I start going weird, and to give me a sharp whack round the back of the head if you ever catch me starting a tweet with the word, “Friends-”.

Anyway. Shortly after reading things, reality began to dawn for me in a way it apparently hasn’t for Daniel Hannan, and I began cataloguing the ways in which his argument is stupid.

Problem number one: Remarkably for a man who’s been in the European Parliament for nearly two decades, he’s misunderstood the EU. He notes that “deeper integration can be more like a religious dogma than a political creed”, but entirely misses the reason for this. For many Europeans, especially those from countries which didn’t have as much fun in the Second World War as Britain did, the EU, for all its myriad flaws, is something to which they feel an emotional attachment: not their country, but not something entirely separate from it either.

Consequently, it’s neither a club, nor a “protection racket”: it’s more akin to a family. A rational and sensible Brexit will be difficult for the exact same reasons that so few divorcing couples rationally agree not to bother wasting money on lawyers: because the very act of leaving feels like a betrayal.

Problem number two: even if everyone was to negotiate purely in terms of rational interest, our interests are not the same. The over-riding goal of German policy for decades has been to hold the EU together, even if that creates other problems. (Exhibit A: Greece.) So there’s at least a chance that the German leadership will genuinely see deterring more departures as more important than mutual prosperity or a good relationship with Britain.

And France, whose presidential candidates are lining up to give Britain a kicking, is mysteriously not mentioned anywhere in either of Daniel’s columns, presumably because doing so would undermine his argument.

So – the list of priorities Hannan describes may look rational from a British perspective. Unfortunately, though, the people on the other side of the negotiating table won’t have a British perspective.

Problem number three is this line from the Con Home piece:

“Might it truly be more interested in deterring states from leaving than in promoting the welfare of its peoples? If so, there surely can be no further doubt that we were right to opt out.”

I could go on, about how there’s no reason to think that Daniel’s relatively gentle vision of Brexit is shared by Nigel Farage, UKIP, or a significant number of those who voted Leave. Or about the polls which show that, far from the EU’s response to the referendum pushing more European nations towards the door, support for the union has actually spiked since the referendum – that Britain has become not a beacon of hope but a cautionary tale.

But I’m running out of words, and there’ll be other chances to explore such things. So instead I’m going to end on this:

Hannan’s argument – that only an irrational Europe would not deliver a good Brexit – is remarkably, parodically self-serving. It allows him to believe that, if Brexit goes horribly wrong, well, it must all be the fault of those inflexible Eurocrats, mustn’t it? It can’t possibly be because Brexit was a bad idea in the first place, or because liberal Leavers used nasty, populist ones to achieve their goals.

Read today, there are elements of Hannan’s columns that are compelling, even persuasive. From the perspective of 2020, I fear, they might simply read like one long explanation of why nothing that has happened since will have been his fault.

Jonn Elledge is the editor of the New Statesman's sister site CityMetric. He is on Twitter, far too much, as @JonnElledge.